The question up for debate is not “should you go abroad for MS in Mechanical Engineering?” It is, “Is it worth studying MS in Mechanical Engineering abroad if you’re already earning well in India?” And that’s what we’ll help you decide. This is also relevant for students / young professionals who have a job offer in India.
This article focuses on one field - MS in Mechanical Engineering. If it’s not the subject of your choice, don’t worry. In the coming weeks, we’ll give similar analyses for the other fields as well.

What You Will Get: An Opportunity Analysis

The number of opportunities opening up after studying abroad is one way to decide if it's worth leaving your current (or potential) job and applying to universities abroad for further studies. The opportunity to gain knowledge, access resources, and achieve better employment is enormous in developed countries.

But it Financially Worth it to Study MS in ME Abroad?

Knowledge is a qualitative factor. The one factor that typically matters the most is monetary returns, especially because an education abroad comes with substantial weight on the pocket.
In very simple words, if you invest X amount of money to go to the US, Germany, Canada, and Australia for MS in Mechanical Engineering, will it yield a net profit in the long run? To answer this question, we utilize our estimate future earnings tool.

What Does the Tool do?

It tells you if it is worth leaving your present job to study master’s in the US, Canada, Germany, and Australia.

How Does the Tool Find Out?

It gives you an NPV figure based on your

Current Salary

Chosen Field of Study

Global Rank of the College Applied to

What’s NPV?

Net Present Value is used to calculate the total of all cash flows (in and out) that are directly connected to a project. For you, it means the difference between the expense borne to go to college in the US, Canada, Germany, and Australia and the extra money you save after employment.
An oversimplified way of explaining NPV is this formula:

NPV = Money saved abroad – Expenses borne to study there – Money you would have saved in India by continuing with the present job, discounted to the present at 8% per annum.
A zero NPV means you get your original investment back plus the required rate of return. If the NPV is positive, it’s great. If the NPV is negative, then it is not so good.

As you read on, you’ll notice two more figures given next to NPV - IRR, and Profit. Profit is self-explanatory. It is the extra savings you make by choosing to study abroad and working there. The Internal Rate of Return is the discount rate that makes the NPV of all cash flows from a particular project equal to zero. It is a time-weighted measure of return, used by most financial analysts over the world. The higher the IRR, the better is the choice for you.

Few Assumptions Used in Our Analysis:

In our calculations, we have accounted for all standard factors and made standard assumptions. They are:

The IRR, NPV, and profit shown are for 10 years after the completion of the moratorium period when the repayment of the loan starts.

In the case of the US, Canada, Germany, and Australia every year, an employee gets a 2% rise in the salary as an increment. Every alternate year, he/she gets a promotion which leads to a 10% increase in the salary. For India, the corresponding numbers are 7% and 20%.

The living expenses such as rent, utilities, car, fuel, insurance, food are averaged as per the country and taken from standard sources. For the US, Canada, Germany, and Australia, the expenses increase by 3% and for India, by 5% every year.

Tax treatment: We have studied and accounted for income tax regimes of all countries in our calculations.

Average investment equals to the total of the average tuition fee of the universities falling under a rank bracket and the corresponding average off-campus living expenses.

We assume in this article that 80% of your education expenses is funded by an education loan and the rest by scholarships/own funds. In the Estimate Future Earnings tool, you can change this input. The loan repayment term is taken to be 5 years.

For every year, for a given country and college group, we calculate (a) net savings in both India and the target country by subtracting the expenses (including income tax and loan repayments) from income, then (b) convert the foreign savings into INR, and finally (c) calculate the difference between the two net savings.

Forex rate treatment: We have considered the current currency exchange rates of the targeted abroad countries’ currency and INR, and also accounted for the expected changes in the forex rates using forward rates for 10 years.

Now that you have a basic grasp of the assumptions, we move on to answering the original question. Due to the huge number of colleges in the US, Canada, Germany and Australia, and varying Indian salaries, we’ve created categories.
For each target country, we will discuss four college rank groups each for three salary levels. To know if it makes sense for you to leave your job in India and study MS in Mechanical Engineering abroad, scroll down to the global rank your target college falls within and then to your salary figure. To get a more granular answer, you can use our tool.

United States

For the Current Salary of 5 lakhs in India

Target College Global Rank

NPV

IRR

Profit

1-50

1.4 Crores

76%

2.5 Crores

51-100

1.31 Crores

74%

2.42 Crores

101-250

1.13 Crores

68%

2.11 Crores

251-500

1,00,81,483

70%

1,87,31,931

Verdict: The NPV is not only positive but also very high for all rankings. It means if you are earning INR 5 lakhs per year right now but get the option to study MSME in the US, you should definitely choose to go. The investment will be highly profitable.

For the Current Salary of 15 lakhs (India)

Target College Global Rank

NPV

IRR

Profit

1-50

33 Lakhs

22%

83 Lakhs

51-100

26 Lakhs

19%

70 Lakhs

101-250

8 Lakhs

12%

38 Lakhs

251-500

(-)4.3 Lakhs

6%

15 Lakhs

Verdict: If you are earning INR 15 lakhs per year right now, it still makes sense financially to study MS in Mechanical Engineering from the US in colleges ranking between 1 and 250 as NPV, IRR, and Profit, in this case, are positive. But if you get admit from a college ranking between 251 and 500, it is not a very favorable proposition as the NPV is negative.

For the Current Salary of 25 lakhs (India)

Target College Global Rank

NPV

IRR

Profit

1-50

(-) 69.66 Lakhs

Negative

(-) 86.20 Lakhs

51-100

(-) 77.42 Lakhs

Negative

(-) 1 Crore

101-250

(-) 95.45 Lakhs

Negative

(-) 1.31 Crores

251-500

(-) 1.1 Crores

Negative

(-) 1.54 Crores

Verdict: For those with a salary of INR 25 lakhs per year, it is not a good decision to leave your job in India and go to the US to study MS in ME. The NPV is exceptionally negative. You would earn and save much more by continuing to work in India.

Canada

For the Current Salary of 5 lakhs (India)

Target College Global Rank

NPV

IRR

Profit

1-50

65.42 Lakhs

47%

1.3 Crores

51-100

90 Lakhs

88%

1.6 Crores

101-250

75 Lakhs

78%

1.36 Crores

251-500

58 Lakhs

63%

1.1 Crores

Verdict: The NPV is positive and also very high for all rankings. It means if you are earning INR 5 lakhs per year right now but get the option to study ME Masters in Canada you should definitely choose to go. The investment will be highly profitable.

For the Current Salary of 15 lakhs (India)

Target College Global Rank

NPV

IRR

Profit

1-50

(-) 40 Lakhs

Negative

(-) 43 Lakhs

51-100

(-) 15 Lakhs

Negative

(-) 10 Lakhs

101-250

(-) 30 Lakhs

Negative

(-) 35 Lakhs

251-500

(-) 47 Lakhs

Negative

(-) 64 Lakhs

For the Current Salary of 25 lakhs (India)

Target College Global Rank

NPV

IRR

Profit

1-50

(-) 1.4 Lakhs

Negative

(-) 2.1 Crores

51-100

(-) 1.19 Crores

Negative

(-) 1.8 Crores

101-250

(-) 1.3 Crores

Negative

(-) 2.05 Crores

251-500

(-) 1.5 Crores

Negative

(-) 2.33 Crores

Verdict: NPV, IRR, and Profit are on the negative side for the salaries around 15 and 25 lakhs in India. It will not be a good decision to go to Canada for higher studies in this situation.

Germany

For Current Salary of 5 lakhs (India)

Target College Global Rank

NPV

IRR

Profit

1-50

97 Lakhs

113%

1.7 Crores

51-100

94 Lakhs

118%

1.6 Crores

101-250

81 Lakhs

111%

1.42 Crores

251-500

65 Lakhs

91%

1.15 Crores

Verdict: NPV, IRR, and Profit are positive and very high for all rankings. It means if you are earning INR 5 lakhs per year right now but get the option to study MSME in Germany, you should definitely choose to go. The investment will be highly profitable.

For Current Salary of 15 lakhs (India)

Target College Global Rank

NPV

IRR

Profit

1-50

(-) 8 Lakhs

Negative

(-) -1.12 Lakhs

51-100

(-) 11 Lakh s

Negative

(-) 7.7 Lakhs

101-250

(-) 24 Lakhs

Negative

(-) 29 Lakhs

251-500

(-) 40 Lakhs

Negative

(-) 56 Lakhs

For Current Salary of 25 Lakhs (India)

Target College Global Rank

NPV

IRR

Profit

1-50

(-) 1.1 Crores

Negative

(-) 1.7 Crores

51-100

(-) 1.14 Crores

Negative

(-) 1.77 Crores

101-250

(-) 1.27 Crores

Negative

(-) 1.99 Crores

251-500

(-) 1.43 Crores

Negative

(-) 2.26 Crores

Verdict: It is clearly visible that NPV, IRR and Profit values for the salaries 15 and 25 lakhs in India are completely negative and in such a case, it will not be a prudent decision to go for Mechanical Engineering masters in Germany.

Australia

For Current Salary of 5 Lakhs (India)

Target College Global Rank

NPV

IRR

Profit

1-50

75 Lakhs

52%

1.45 Crores

51-100

74 Lakhs

55%

1.42 Crores

101-250

61 Lakhs

49%

1.19 Crores

251-500

46.64 Lakhs

40%

94 Lakhs

Verdict: Engineers earning around 5 lakhs in India, if you get an opportunity to study in Australia in the colleges ranking between 1-500, you must go for it. The table above vividly depicts the positive values of NPV, IRR, and Profit for 10 years.

For Current Salary of 15 lakhs (India)

Target College Global Rank

NPV

IRR

Profit

1-50

(-) 30 Lakhs

Negative

(-) 26.83 Lakhs

51-100

(-) 30.81 Lakhs

Negative

(-) 29.83 Lakhs

101-250

(-) 43.53 Lakhs

Negative

(-) 51.99 Lakhs

251-500

(-) 58 Lakhs

Negative

(-) 77 Lakhs

For Current Salary of 25 Lakhs (India)

Target College Global Rank

NPV

IRR

Profit

1-50

(-) 1.33 Crores

Negative

(-) 1.96 Crores

51-100

(-) 1.34 Crores

Negative

(-)1.99 Crores

101-250

(-) 1.46 Crores

Negative

(-) 2.21 Crores

251-500

(-) 1.61 Crores

Negative

(-) 2.5 Crores

Verdict: NPV, IRR and Profit values for the salaries of 15 and 25 lakhs are highly negative. You will be better off working in India than studying in Australia if you are earning around these salary denominations.

Last Few Words

There is no doubt that a Master’s degree in mechanical engineering from most colleges in the USA will offer you a decent career. But for countries such as Australia, Canada, and Germany, it only makes sense when you are earning only around 5 lakhs in India. Therefore, use the numbers we’ve given above for assistance. That said, the numbers are just a guide. The final decision should be taken after considering all factors.

About author

Yogender Panchal
Yogender is a tech enthusiast with specialization in digital marketing. He is currently working at Gyandhan a leading company provides Education Loan who are studying Abroad. Playing Volleyball, driving a car, traveling, researching new online marketing trends are some of his interest areas that keeps his rejuvenated.